South American Real Estate News

To manage abundance, is to farm in the Chaco Paraguay

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“The Chaco is what we have defined as a very attractive area to invest, for simplicity, for the potential and for a set of variables that make it incomparable,” said Rodrigo Artagaveytia, director of Everdem; Who almost two decades ago decided to try their luck in the Chaco.

In a very entertaining and fascinating talk, this Uruguayan agricultural producer, with an entrepreneurial spirit and business vision, shared his experience in Paraguay with ForoRural. This country does not stop surprising those who decide to bet on it.

“18 years ago, the situation was very different. A large part of the territory was a virgin field. Nobody went to Paraguay because they didn’t believe in it. Little by little, it began a rapidly evolving process of transforming its farmland, which today has a very important percentage already developed or developing.

Why Paraguay? How was the route?

-I went to Paraguay, first, by a family bond; My father had a field in Corrientes, and my uncle in Mato Grosso. I always heard that the tropics were spectacular with their hot areas. I got to know Paraguay through the Rural Association of Uruguay (ARU) and the exhibitions, and I liked it very much: I felt it was a country of opportunities. I established ties with very good people and understood that it was possible, that it was no madness and that Paraguay was not what people believed.

Paraguay has formal and informal people and serious and not-so-serious people, as in any country. So, if you surround yourself with the right people, everything works. There’s no mystery. If you work with a good notary, get advice from a good agronomist, and connect with people who are working seriously, you are working just like in another country. That’s what I saw, and it was what I liked and tried. That’s what helped me get out and take people there. I lived it, and I felt it.

How were your first years in Paraguay?

The first few years were hard because everything that seemed easy was not so easy. My big mistake was underestimating my lack of knowledge of the country. It was difficult not because I was, but because I did not prepare myself for a tremendous challenge. I went to war with a toothpick. I had a lot more than a toothpick, but I was missing something very important, meeting people and having a team like the one we have today. At the time, I knew how easy it was, but I did not know how to assess my shortcomings to face what was coming. I got into big projects: without equipment and without knowing people. Not knowing who’s Who. Who’s good, and who’s bad. Which contractors met my expectations and which did not. Then there was a lot of trial and error.

But I did always have by my side, and that was right, it’s my family. I arrived with my wife Inés and my four young children. A challenge and support. It was the strongest team I’ve ever had. Carrying forward a project like this, knowing that by your side there is a woman who always goes forward and supports you, is priceless. The story would have been different if they hadn’t been.

At work, we had some failures and many difficulties, but we always knew that at the end of the day, the sunset was going to be spectacular. Always know that ‘ the positive ‘ is there and that the good comes with perseverance and work.

The country is optimistic. The Chaco is positive. Land, productivity, meat production and people. Government and markets are optimistic. It all adds up and makes it a whole that’s worth it.

Over time I managed to form a team, and the company was developing and growing in different work areas.  Convinced of what the Chaco was and its potential, we began to bring people. We were taking firm and constructive steps, with the security that gave us more. There is so much ahead and what can be done that today, after 18 years, I would say that this is just beginning. That’s what I’m passionate about every day.

What is it like to produce today in Paraguay?

— The reality of Paraguay that we met is one, and that of modern Paraguay – which is not just the Chaco – is another. Day by day the country grows because every time it works better. In our field growth, meat production, export growth, increased markets and see five-year-old steers, which are now normal.

Paraguay is going well agriculturally. It is becoming more efficient, it manages the pasture better, there are more prepared people, it works better with genetics, there is more insemination in a fixed time, and the bulls used come from improvement programs. All this is a package that goes farther and farther. So modern Paraguay works and produces as in any other country.

It is very important to know, understand and respect their idiosyncrasies. Things are the way they are for a good reason. Once you know the idiosyncrasy, the people, and the reason for everything, it’s much more manageable. It is easier to live, coexist and share when you understand the essence of the country.

What is the impression of an Uruguayan who knows the Chaco for the first time?

— The famous phrase that defines an Uruguayan who arrives for the first time in the Chaco, an area where pastures abound, is: ‘ Che, here is a lack of cattle. This is missing numbers. ‘ But not really, because in the Paraguayan lands, you manage abundance. In Uruguay, it is common to spend the winters with the bare fields and administer the scarcity by added feed. In the Chaco, the fields are handled with a lot of grass, which must be so. The Chaqueño does not know if their animals are two or four teeth or if they are down or up, not boquean, do not look at the teeth. The cow does not wear its teeth because they live eating in abundance.

This is mainly due to the management, but the great production of these pastures is given by the climate, the type of soils and their excessive fertility; They are very high-yield pastures. A prairie produces 8,000 kilos of dry matter; in Paraguay, any pasture produces between 14 and 16,000 kilos.

As a businessman, how is Paraguay to invest?

Investing in Paraguay is very simple, much more than people think. But, like every business, you must know how to do it.

— The numbers are predictable, budgets are predictable, and work schemes are simple because the variables at stake are not so many. As for the markets, Paraguay has the same stability or instability, that is, in Uruguay. It is a country inserted in the globalized world: free export and market for many markets. The refrigeration industry has grown dramatically, both in its capacity for slaughter and quality. It works just like in Uruguay. Speaking of cattle ranching, as far as the purchase of wintering and fattening is concerned, it is similar to Uruguay.

You start with much cheaper soils and much higher productivity. The truth is that production costs are much lower, and this is what ends up being a big difference.

I repeat something that I was told many years ago: “What steps a cow has to be worth the same in different parts of the world”; That is, the cow in the Chaco Pisa, a productive hectare that is worth 1,700 dollars and produces 160 kilos of meat per hectare, while in Florida (Uruguay), the cow steps a field of 3,000 dollars and produces 90 kilos per hectare. So it’s worth almost double and has half. The difference is three to four times. This huge price gap between Uruguay and Paraguay is meaningless, but it will shrink.

Ten years ago, people went to Paraguay to buy cheap land. Today you will also purchase land at a lower value, but do the numbers, know the production numbers, and business is more tempting.

Is there any kind of restriction or limit when transferring money from one country to another?

— Paraguay is a free, absolutely free country. There is no kind of restriction in that regard. All you have to do is prove the origin of the money, like anywhere. You can move the money from there to here without any inconvenience.

Are there still land offerings in Paraguay?

There is a land of all types, virgin lands, others more developed, fields with more and less infrastructure, stays in operation, everything, the offer is large and varied.

There are still more than two million hectares to develop, respecting environmental laws, which demand to leave 50% of the forests or scrub standing.

Currently, what are the reference prices for a hectare?

-those who buy a virgin hectare in Paraguay today will find fields from 280 USD to 600 USD, depending on the type of land, logistics, and area, among other variants. The same production area is 800 USD and 1,500 USD per hectare. However, it should be taken into account that half ( uncut forest) does not produce, so the productive hectare is worth twice as much, approximately 1,600 dollars.

Considering the type of entrepreneurship and investment, confidence is undoubtedly essential; how does the customer experience Everdem?

No doubt that in this type of venture, trust is everything. From a good financial project with the highest accuracy in numbers.

The order and the transparency with which we manage contribute to strengthening it. This is present in each area of work because in Everdem, in addition to purchasing and selling fields, we perform an integral service. We take care of the administration and exploitation of the fields, so the client doesn’t need to go to Paraguay. We solve everything, absolutely everything.

After so many years and a journey in Paraguay, what would you say is the specialty of Everdem?

In these years, many Paraguayan lands went from being virgins to being developed fields. Today the market has a significant percentage of this type of estate, others that are developed half and others that are not developed. The reality is that whoever buys a virgin land and transforms it into a fertile field has a very large price differential, but “how to” is the great challenge; And in this, we are specialists, I would say more, we are experts and not dependent on one, we are a great team. We are the team I would have liked to have 18 years ago when I came. Today we have it, and that’s our differential. We have a lot of experience and know-how and do it well.

Source: Foro Rural

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors who want to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing specialized advice on property acquisition and investment tours.

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www.gatewaytosouthamerica.com

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